Microsoft will be offering steep discounts to PC manufactures that will use Windows XP in ultra low-cost desktops and notebooks. However, the discount comes with limitations, as Microsoft will be placing hardware restrictions for these manufacturers.

In hopes of fostering adoption of Windows over its Linux competitor, Microsoft will offer steep discounts of Windows XP Home Edition for ULPC desktops and notebooks like the Asus Eee PC or OLPC. The new program ask manufacturers that screen sizes on notebooks be smaller than 10.2 inches, touch screen not be used, hard drives should be under 80 GB, contain less than 1 GB of memory, and a single-core processor that clocks less than 1 GHz. The program has provided exception for pre-determined chips like Intel’s Atom and Via Technologies’ C7-M processors.

Microsoft’s goal is to limit hardware capabilities of upcoming generations of ULPCs so they do not reduce the demand for modern PCs with capable hardware. The limitations allow “PC makers to offer low-cost alternative, and it prevents eroding of pricing and margins in the mainstream OS market,” said analyst Roger Kay, EndPoint Technologies Associates president.

Microsoft’s program is expected to launch in June. Prices will reflect the market or country’s wealth. First world countries will get Windows XP Home Edition at $32, while developing markets such as China or India will only pay $26.

The surprising success of the Eee PC has forced many OEMs to quickly produce its own ULPC. HP recently launched its Via based Mini-Note, hoping to cash in on the growing market. Over twenty new designs of ULPCs are expected to launch later this year.

Microsoft had earlier announced its plans to stop selling Windows XP to OEMs after June 30, but ULPC has been noted as the exception.

The reduction seems more like an attempt at making Windows XP ULPCs less attractive than say, a more recent ULPC unit that would ship with Windows Vista.

 

Analyst Opinion - We recently took a look at the new Dell XPS 730 H2C and spoke about an interesting notion on how this new system was invading Alienware’s territory. Given the proliferation of performance products, I think it is time to take a closer look at branding in this emotional market segment. Can you differentiate a mainstream gaming PC from a more boutique-like gaming PC?

Discussing this question is actually a fun exercise for me, because I’ve actually got a couple of degrees in marketing and have held a couple of branding jobs in the past. If you take everything you are taught in marketing and branding (and a few things that are not), the tech company that does the best job with product positioning and brand management is Apple, bar none. Even if I do talk about Apple a lot lately, I will be using them as a reference again, since it just makes sense here. Looking beyond PC technology, there may be a company that does an even better job in of brand management than Apple: That would be Ferrari, in terms of generation cash for its parent company (Fiat). That said, I generally believe that the car industry is much better at brand segmentation than the PC industry.

Branding 101

By definition, a "brand" is a trade name given to a product or service. Some folks like to suggest names and brands are different, but they aren’t. Why we call a brand a brand is because we invest in it and generally attach a collection of images to it. It is generally connected to a symbol, logo, slogan or design scheme.

We could drop into a mess of definitions surrounding products, lines, corporations, or parents, but for our purposes, we can just shortcut this and say that a brand is a name that someone attaches to products to help them sell something in this context.

Doing branding well

What differentiates companies that do branding well like Budweiser, GE, Apple, and Ferrari from those that do not is the clear messaging they attach to their brands and the clear distinction between the products that have brands associated with them. Let’s focus on Apple first.

Apple does product branding about as well as it can be done. Each offering has clear attributes that differentiate it. iPod Classic means it is a trusted design (kind of like Coke Classic). The iPod Touch, Shuffle, and Nano names identify the core marketed benefit and the "Pro" modifier on some of their products indicate professional use. If I were to name a product like Macbook Pro you know a great deal about the product because Apple has a designed a brand for it that is easy to remember and consistent with the parts of the product that differentiate it within a family. I don’t even have to tell you it is from Apple in most cases because the company has taken steps to make sure that you will make that connection.

Ferrari, which also has a very simple line of products, focuses more on the company brand and ensures that people always see that brand as a sign of exclusivity and performance. You will never see the Ferrari brand on a product that doesn’t have something unique about it. The related offering is always connected to some kind of performance message. Porsche, on the other hand, adds design to the mix so that if the name "Porsche" is attached to a product also indicates a visually pleasing appearance. Both companies take extreme care of these brands and license them out aggressively.

Dell, Gateway, HP

All three technology vendors have a nasty habit of using numbers to differentiate their products. This is done because it makes it easier for the vendor to manage a product, but it makes the product much harder to sell. Model numbers are also in place because these companies have vastly more complex lines of products. The bottom line is that the complexity of the product-mix would make the lines virtually impossible to sell if these companies used distinct names. That is the reason why they have line brands like Latitude or Presario. Even so, they have lots of these brands, making it much more difficult for a potential buyer to choose an certain product.

In HP’s case, let’s take one extreme example. For a consumer laptop you have the Macbook from Apple and from HP one product like the Compaq Presario V6700TX. Now turn away from the screen. Can you remember the Apple? Can you remember the HP product? Complex lines make effective branding nearly impossible.

Premium Brands: Alienware, Voodoo, FX, XPS

First, Dell bought Alienware. Then HP bought Voodoo. In response, Gateway brought out its FX premium line. Before Dell bought Alienware, the company had the XPS series, which was then positioned as a premium performance line and all of these systems were, at least initially, focused on performance and gaming.

The danger in having a premium brand is eroding it. The classic examples are the Lincoln Versailles and the Cadillac Cimarron. This was where GM and Ford got the brilliant idea of bringing out an aggressively priced car within their premium brands, which resulted in a significant drop in sales for Lincoln and Cadillac. People who bought Cadillac and Lincoln were buying exclusivity and those value moves nearly killed that aspect of the premium brands with a disastrous effect.

Currently there is a clear distinction between Alienware and Dell as well as Voodoo and HP. The first to blend the brands was HP with the Blackbird where the company referred to it as having "Voodoo DNA". In cars this is like a performance car being connected to the racing program that also bears the company’s name, like Ferrari and F1 racing. That is a good use of the performance brand without eroding it, however the Blackbird itself appears more advanced than anything Voodoo has right now and, should that continue, the performance brand’s value may erode.

While we in technology know the connection between Dell and Alienware, that connection isn’t widely marketed. This makes the erosion risk lower but it doesn’t create any synergy between the two companies either. The danger is that folks like us start creating the connection for Dell and the Alienware brand erodes as a result.

Gateway took a safer path of simply putting a performance designator on an existing line but their problem is they don’t have the equivalent of a racing line (Voodoo is to HP like an F1 car is to Ferrari), which means that Gateway does not get the pull for their products HP and Dell can.

There are ways to build a value performance product, but you still have to invest in making the product right. The Sunbeam Tiger was one of my favorites, but it has nowhere near the cache of the Cobra that it tried to emulate.

In the end, question for HP’s and Dell’s premium efforts will be how well they can pull some of the brand benefits from Alienware and Voodoo into more volume oriented products without destroying the premium benefit associated with the Voodoo and Alienware brands.

And that isn’t exactly an easy task.

Rob Enderle is one of the last Inquiry Analysts. Inquiry Analysts are paid to stay up to date on current events and identify trends and either explain the trends or make suggestions, tactical and strategic, on how to best take advantage of them. Currently he provides his services to most of the major technology and media companies.

 

Chicago (IL) - If you were to try to squeeze your server into a notebook form factor, how would it look like? You can check Eurocom’s new Phantom D90xC Phantom-X portable computer to find - it comes with a quad-core Xeon processor, two graphics cards and, if you can wait a few more months, up to 3 TB of hard drive storage or 384 GB of SSD storage. Just don’t ask about the battery running time.

There is a market for many products you first think don’t make much sense and this latest Eurocom portable computer may be one of them. Calling this Phantom model "portable" may even be a bit of a stretch, as it weighs in at around 12 pounds (or the equivalent of four Macbook Air notebooks), but if you compare its capability to act as a server, then Eurocom’s achievement to fit all relevant server components into a notebook form factor, then you certainly see a remarkable product reveal itself.

Equipped with a 95-watt quad-core Xeon X3360 processor (45 nm, 12 MB L2 cache) running at 2.83 GHz, the 17" D90xC is priced from about $3350. If you were to check all the options, which include a 1920x1200 pixel display, a 2x Blu-ray drive, two GeForce 8800M GTX graphics chips, three 64 GB solid state disk drives, as well as Windows Server 2008, you end up with a very capable notebook that will cost just under $10,000 (choose 500 GB hard drives instead and the bill will be about $7200). Eurocom said that the notebook has the physical space to integrate up to six hard drives for up to 3 TB of storage space (960 GB of hybrid hard drives or 384 GB with SSDs), which will be available in the September time frame.

The D90xC is not meant to be carried around like a notebook, so don’t expect typical advantages you see from modern notebooks, such as increasing battery times that are now in the 5 hour range with some models. Considering the fact that there are very power hungry components in this notebook, a battery time of about one hour actually deserves praise. This author remembers his first precious multimedia notebook, a 1996 Gateway 12" model equipped with a Pentium MMX-166 MHz CPU that barely hit 90 minutes. 1 hour may not sound like much today, but consider a server (including display) that can run for 1 hour on a battery alone could be a very special and valuable product for some people out there.

 

Leicester (UK) - Here is an interesting math exercise that, if you are really into text messaging, can get you thinking twice whether you continue to use your SMS service or simply make a call next time. In a best case scenario, the comparison of the cost of text messaging is just another sign how overpriced these services are, at least when they aren’t included in a flat-fee plan.

We all know that text messaging isn’t cheap, so the news that you are getting ripped off by your cellphone provider for such a service isn’t new. However, Nigel Bannister, a space scientist at the University of Leicester came up with an interesting idea to compare the cost of text messages - he compared it to downloading data from the Hubble space telescope.

Based on the UK market, he took a cost of 5 pence per SMS and assumed that a user would always use the full capacity of each message - 160 characters. Since each character has just 7 bits, each message has a maximum of 140 bytes (160x7/8). The cost per megabyte, which holds 1,048,576 bytes, therefore comes to £374.49 (7490 text messages x 5 pence).

We took a quick look at the U.S. market and found that T-Mobile charges $0.15 per text message, which brings the per-megabyte price to a stunning $1,123.50. Yes, you can trim the cost by purchasing a (domestic) message bundle: T-Mobile charges $5 for 400 messages ($0.0125 per message), $10 for 1000 messages ($0.01 per message) and $15 for unlimited messages.

Bannister said that NASA told him that download 1 MB of data from Hubble costs about £8.85, or about $17. However, that cost only includes the transmission of the data to the first point of contact on the ground. So he made some assumptions what it may cost NASA to get this 1 MB of data into its computers and came up with a range of £8.85 to £85, which translates into a range of $17 to $166. Converted into a per text-message cost, Hubble transmissions would cost about 2.2 cents per message.

In any case, this per-megabyte comparison undercuts the text messaging rate by a far margin, unless you are not subscribing to an all-you-can-eat flat fee.

Yes, we know, it is a questionable comparison and only some of us are writing 250 or more text messages per day. But we are still left with a sensation that cellphone text messaging is a bit pricey.

BioWare, a division of Electronic Arts, has backed down on its original plans to require users to re-authenticate Mass Effect ever ten days. The original announcement was met with hostile reaction from the gaming community. We reported last week BioWare’s producer Derek French announced that PC editions of Mass Effect and Spore would require online validation every ten days for the games to continue working. After a massive backlash, BioWare has confirmed that that the titles will include a different version of SecuROM technology. The new version will require users to validate their game only one time. "BioWare has always listened very closely to its fans and we made this decision to ensure we are delivering the best possible experience to them," said Jay Watamaniuk, Bioware community manager. “"To all the fans including our many friends in the armed services and internationally who expressed concerns that they would not be able re-authenticate as often as required, EA and BioWare want you to know that your feedback is important to us.” According to the Mass Effect FAQ posted on BioWare’s site it appears that users will still be require to re-authenticate when ever the user chooses to download new game content. This strategy runs in line with NVIDIA’s new belief that publishers will begin to treat games as services, offering post-launch content to legitimate users as a way to reduce piracy. The new solution will allow “gamers to authenticate their game on three different computers with the purchase of one disc,” and will now also allow users to play the game without needing the DVD in the drive to play. On a related note, Electronic Arts also released a statement saying Spore’s similar copy protection to will under go changes, requiring validation on patches or content updates.

This year’s JavaOne conference was everywhere. If you weren’t at it, you could catch the live webcasts, watch the repearts or, failing that, catch it in virtual world, Second Life. Usually we wouldn’t suggest you substitute the Second Life version of an event for the real one however, it looks like this year, those who did just that, may have been better off. Because putting up with Second Life’s server lag is probably a hell of a lot better than catching a stomach flu at the real thing.

Sun Microsystems and Java are proud to be virus-free however several staff and attendees at the JavaOne conference at the Moscone Convention Center in San Fransico managed to catch norovirus that caused vomiting, nausea, abdominal pain and diarrhea.

70 people in total were affected by the virus, which the San Fransico Department of Public Health first got wind of on Wednesday, three days after the conference commenced. 63 staff and 3 attendees picked up the virus that is apparently contracted and most commonly spread by food contaminated with vomit or fecal matter or contact with an infected individual. Norovirus usually lasts between 24 and 48 hours however, in some cases, it can last for up to five days.

Tickets for JavaOne can cost anywhere up to $2,350 and that’s not including what you’d have to shell out for travel and hotels if you’re from the East coast.

The conference has been running for the last 12 years and since it began in 1996, the venue hasn’t changed. While we can make all the jokes we want about Sun Microsystems and viruses it’s more likely to be the conference centre that suffers for this little episode.

 

Redmond (WA) - Electronista is reporting that Microsoft has sold its two millionth Zune since the product’s launch back in November 2006. The figures were tallied by the NPD Group and it appears Zune sales cut slightly into Creative’s market share, bringing it from four percent to two percent.

As you can imagine, Apple still remains the top dog in the portable media player market and sold 10.6 million units in the last quarter. Any way you do the math, Microsoft is getting clobbered in this market.

Read more ... Electronista.

Reports that the iPhone has sold out completely have begun to circulate

Last week reports began to emerge regarding iPhone stocks in the UK. Mid-April saw British iPhone network provider, 02UK announce a price cut of £100 on the 8GB iPod. O2 stores and retailer Carphone Warehouse both saw a huge increase in sales in the days following the price slash with O2 branches in Newcastle, London and Birmingham selling out on the day the price cut was announced.

This morning similar rumours regarding US stores started cropping up with sales representatives from Apple saying the iPhone is out of stock “company-wide”. Computerworld contacted four US Apple stores and was told that the iPhone was out of stock and not only could they not give a delivery date for more stock but they also said they had no ideas as to why the Apple website was showing a “currently unavailable” message when customers tried to purchase online.

While the iPhone is still fairly readily available in Germany and France the reported shortage in both the UK and US is just more kindling for the 3G iPhone campfire.

AT&T last week sent an email around the sales staff letting them know that vacation time scheduled between June 15th and July 15th, which had not already been approved, could not and would not be granted. A similar email was sent last summer in the lead up to the launch of the original iPhone.

At the time of print an Apple spokesperson had yet to get back to us regarding the sold out iPhone rumours and we know better than to ask about the 3G iPhone. We’ll keep you posted.

Related Links Leaked AT&T Memo Hints At Mid-June Launch For 3G iPhone
AT&T Pulls Information Regarding Free WiFi For iPhone Users From Website
VoIP On iPhone Using EDGE Now Possible
AT&T To Subsidize 3G iPhone By $200: Is Apple Changing Its iPhone Pricing Strategy?

Security software vendor, PC Tools Software, has issued a report stating Microsoft Windows Vista is more susceptible to malware than Windows 2000, an operating system over eight-years-old. However, PC Tools Software reckons that Windows Vista is 37-percent more secure than previous generation Windows XP.

Data gathered from users of PC Tools’ ThreatFire security service indicated Vista allowed 639 threats per thousand computers, compared to 586 for Windows 2000 and 1,021 for Windows XP. According to PC Tools, with an infection rate of 639 per 1,000 PCs means 64-percent of Vista PCs have already been compromised.

"Ironically, the new operating system has been hailed by Microsoft as the most secure version of Windows to date," Simon Clausen, CEO of PC Tools, said in a prepared statement. "However, recent research conducted with statistics from over 1.4 million computers within the ThreatFire community has shown that Windows Vista is more susceptible to malware than the eight-year-old Windows 2000 operating system and only 37-percent more secure than Windows XP."

Despite the claims, PC Tools does not clearly indicate its methodology in its research. What constitutes as a threat is not defined, how threats were chosen, and whether the same threats were applied to all participating PCs. Since PC Tools gathered its data from its own crop of users, it is assumed the company only gathered statistics – something that is easily manipulated.

Microsoft fired back with their statistics and findings saying, “we appreciate independent studies and encourage researchers to help us make our products more secure; however, this is a study by a vendor of anti-malware products. ThreatFire vulnerability comparison numbers certainly don’t reflect our vulnerability findings from the malicious software removal tool, which ran on over 400 million machines in December 2007. From June 2007 through December 2007, the MSRT found malware on 2.8% of the Windows Vista machines it ran on, vs. 7.2% of Windows XP SP2 machines. It found malware on 5% of Windows 2000 SP4 machines and 12.2% of Windows 2000 SP3 machines. Note that for Windows 2000 this spans both client and server machines.”

 

Mountain View (CA) - Dozens of civil rights and rural advocacy groups have asked the Justice Department to scrutinize any future Google and Yahoo partnership for anti-trust violations - even though no definitive deal has been announced. The groups argue that both companies would have a combined 90% of the online search advertising market and this could drive up prices and prevent competition.

The Justice Department is examining an earlier partnership between Google and Yahoo back in April. Since there is no official word about any future merger or partnership, the Justice Department is holding off on any further investigation.

Read more ... BBC.

 

White Plains (NY) - Two bumbling burglars have been arrested after one of the laptops they stole ’phoned home’ and transmitted webcam pictures to the victims. Edmon Shahikian, 23, and Ian Frias, 20, broke into a White Plains NY apartment and took several thousand dollars worth of electronics which included an Apple MacBook. One of the victims activated the MacBook’s ’Back to My Mac’ security software and took several pictures of the burglars.

Lieutenant Eric Fischer told The Journal News that the victims did a "phenomenal job" in helping catch the thieves. Back on April 27th, the burglars took approximately $5000 in electronics from the apartment which included two laptop computers, flat-screen televisions, two iPods and several game consoles.

Fortunately, one of the victims works at a nearby Apple store and was clever enough to activate the ’Back to My Mac’ software and the built-in webcam. At first, she saw just an empty chair, but was eventually able to remotely photograph both Shahikian and Frias as they used the MacBook to do some online shopping. One of the roommates recognized the pair from a recent party held at the apartment and notified police who then arrested Shahikian and Frias at their home.

Shahikian and Frias are now out on bail and will return to court on May 15th to face second-degree burglary and possession of stolen property charges. In a separate incident, the pair is also charged with possession and transportation of three pounds of marijuana.

Looks like a slam dunk for the good guys, you don’t see that too often.

Source - Comments | Print | Send to a friend

Earlier in the week HTC announced the launch of the HTC Touch Diamond phone, which was quickly dubbed the iPhone’s biggest competitor. Now it has been announced that European service provider Vodafone will offer the Touch Diamond as well as the iPhone.

Vodafone announced earlier in the week that it had signed a deal with Apple to distribute the iPhone in 10 countries; Australia, the Czech Republic, Egypt, Greece, Italy, India, Portugal, New Zealand, South Africa and Turkey. It also emerged that it would not be the only network provider to offer the iPhone in Italy with Telecom Italia also selling the fruity phone.

Florian Seiche, vice president of HTC Europe said that the HTC brand is becoming increasingly popular with European operators choosing to sell HTC-branded phones, rather than offering them as own-name handsets.

Vodafone will join Orange in selling the phone throughout Europe and T-Mobile will be selling it as the T-Mobile MDA Compact IV.

The Taiwanese company’s latest release will hit European stores in June. In a few months, the phone will become available in Asia and the Middle East and by the second half of 2008, it will be available in North America and Latin America. Pricing information for the iPhone rival has yet to be announced.

The launch of the original Touch in June of last year was significant for HTC who, in the past, largely focused on building handsets for other companies. The Touch handset proved popular selling 3 million units however that figure can’t hold a candle to the iPhone which reportedly sold 1 million units just 74 days after it’s release.

 

Mountain View (CA) - Mozilla announced on Saturday that it has put the finishing touches on the Release Candidate 1 code of Firefox 3. The developers are optimistic that RC1 is pretty much the final code of the new browser: If there are no unexpected bugs, RC1 will turn into Firefox 3.

At this time, Firefox 3 RC1 has been released into a closed beta testing phase to a group of about 1.2 million users. There is no information when RC1 will be made available to the general public, but we would expect the software to its download servers.

According to a post on the developer blog, Mozilla expects RC1 to become Firefox 3 final "if no new showstoppers are found". In case new bugs are surfacing, Mozilla intends to release further release candidates "until [Firefox 3] is ready to ship".

There is no information on the possible availability of Firefox 3, but given the optimism of the developer team, we believe that June is a realistic timeframe for the launch and boost of Firefox downloads - which stand at about 549.7 million as of this morning.

The release of Firefox 3 rings in another round in the browser battle between Mozilla and Microsoft. At least from today’s view, Mozilla seems to have a huge time advantage over Microsoft, whose IE8 is still in an early beta phase. You can read learn more about the differences between the two new browsers in our previously published story Firefox 3 Beta 4 reveals difference in design philosophy to IE8.